does amount owed affect pence per pound?

[kit]

This may seem a daft question, but does the amount you owe to a company affect the amount they want back in the pence? I ask this because I have been reading various comments about Northern Rock - who are annoyingly our biggest creditor.

We have been in our IVA for one year, paying off approximately £0.55 in the pound (don’t have paperwork to hand).

I took out a NR loan in April 2005 for £17,000 to pay off two credit cards that had very high interest. We were advised at the time by NR that as we still had several other credit cards to pay off with high interest repayments, that we should take the NR loan out over the maximum 10 years so that we could concentrate our efforts and spare money on paying off the remaining credit cards. The problem is she didn’t make it clear over the phone that it would make the overall repayment over double the loan amount – yes they wanted £36,000 by year 10! Two days later when the paperwork arrived after nearly dying of shock I tried to cancel the payment protection as I had heard you could get cheaper payment protection from companies if you bought it separately. I also asked them to quote me the same loan but over a shorter period. NR said that they couldn’t cancel the loan or the protection and that if I was to go through another loan request to cancel this one, they would take the £36,000 into account as money I owed so basically I had no chance.

The thing is, we never intended actually having the loan for the full length of its term because several of our loans would have finished between January 2007 and January 2009 freeing up over £1000,00 per month to finish the NR loan early – by early 2011 if not before - which they said we could do, so therefore we wouldn’t have paid the full £36,000. After entering into the IVA the finish time is the same – 2011 not 2015 that the original loan was taken out until.

We never took this issue further because a year later we went into the IVA and it was obvious that they wouldn’t get the full amount back, but as they are still our biggest creditor and as I am at risk of redundancy or of doing the same job for less money than we may need to lower our contributions and I am now concerned after reading through the comments that NR will only accept a minimum of 40-45p in the pound which was a complete surprise.

I wonder therefore if it would make any difference to try to pursue NR (obviously with the agreement of our IP)or if in fact everything they did was correct and even if it wasn't it would have no affect on how much they want in the pence?

[ivoriva]

Well, I dont think you were advised correctly by NR - but its probably too late to change that now. As far as I know, you should have a set time to cancel any insurance or loan in the cooling off period (is it 14 days)? I did successfully cancel PPI on one of my agreements within the cooling off period a few years ago.
If for any reason your IVA fails, then you could go for the jugular and attempt to get the PPI charges refunded if you think it wasnt above board. I think this could involve putting the debt into dispute, which would also mean they cant chase you for the money until the matter is resolved - buying you a bit of extra time as well. You probably want to visit the consumer action group www.consumeractiongroup.com website for info on claiming back PPI and charges etc.
I doubt you would ever get to speak to a person who judges a IVA proposal - so probably little point speaking to NR personally about what they might accept. I would leave that to your IP, as they will be in contact with the people that matter.

[PoorbutHappy]

I complained to our bank about misselling loans. So did my wife, but she had unwanted PPI too.

After ignoring us, and then complaining via the FOS, I got £4K back off em. Me Mrs got lots more bless her!

I never saw the cash though, they just reduced my debts to them by 4K less than when I started my IVA, still felt good though.

All it took was a few stamps.

[MelanieGiles]

I would have thought that if Northern Rock supported your IVA in the first place, that they will give serious consideration to your proposed variation, especially as you will have good grounds for justifying the need to reduce your contributions through loss of income.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk